In Texas, a 5 to 10 year non-compete agreement related to a sale of business is the norm. n addition to the non-compete restrictions in the sale documents, those sellers who stay employed by the buyer after the sale often sign a second non-compete agreement as part of their employment package, which does not kick in until after their employment with the buyer terminates.
Given the difficulty of protecting intellectual property related to cannabis and cannabis-based products with patents, copyrights and trademarks, any company in the cannabis industry should formulate a trade secrets protection plan from the very outset of the business, in order to ensure that the proprietary information at the center of its business does not lose its confidential status down the road.
If an employment agreement entered after May 11, 2016, does not contain an immunity notice, employer can sue an employee for trade secrets misappropriation, but will not be able to recover its attorneys fees or obtain an award of punitive damages.
Since trade secrets are not registered with the government, like patents or trademarks, companies must take proactive measures to preserve them. Those who fail to take reasonable measures, risk finding out down the road (usually in court, when the try to recover stolen trade secrets from a rogue employee) that their information has lost its trade secrets status.
An employer cannot wrongfully breach a provision of an employment contract that is favorable to the employee (such as reducing his wages without his consent and without contractual authority to do so) an then go into a court of equity to secure, by injunction, the enforcement of another provision favorable to it.”
Both employers and employees are wondering how COVID-19 will affect the litigation of the non-compete disputes around the country and whether the courts will be more or less likely to enforce such agreements in light of the nationwide health emergency and the drastic economic downturn.